The Central Bank of Ireland has gone ahead and stated that it doesn’t seem any likely to approve the investment funds for most retail crypto investors. This is because they lack the information on how to navigate through the high-risk asset class. The report published this month titled- Securities Markets Risk Outlook Report: A Changing Landscape- went on to describe the assets of cryptocurrency as a new product offering in the markets of securities which was quite complex and a major threat to the protection of investors.
Central Bank of Ireland Doesn’t Want To Approve High-Risk Asset Class
Although the Central Bank of Ireland did field several queries the previous year about Alternative Investment Funds regarding crypto, it is now not expected to approve an AIF for the investors of retail crypto.
The bank believes that such investments might be considered suitable for wholesale or professional investors- but definitely too complicated for small-time investors. In the report, the Central Bank mentioned that it was highly unlikely to approve a UCITS or a Retail Investor AIF proposing any single exposure to crypto-assets, as it would also take into account the extremely specific risks that were attached to crypto-assets.
Patricia Dunne, the Director of Securities and Markets Supervision for Ireland, went on to provide some explanation of the bank’s thinking to Bloomberg on the 8th of February, stating that there are too many unanswered questions around things like custody, money laundering, and even just liquidity and volatility regarding retail investing of crypto.
The regulatory attitude towards crypto in the United Kingdom isn’t really much more favorable with HMRC laying out strict new guidelines for the taxation of DeFi recently. So, it isn’t just Ireland that has reservations against crypto- the entirety of the United Kingdom has been facing the same.
